– Obtain a business number from the Canada Revenue Agency (CRA) for an Import-Export Account.
Visit the CRA’s online business registration for that purpose. It’s free of charge and requires only a few minutes, and if you use Clearit as your customs broker, we’ll even do it for you. Before you check out Canadian import duties and start the import process, a few important requirements need to be looked at:
– Identify the goods you plan to import – an accurate description is necessary
– Identify which country the goods are coming from and in which country they were manufactured
– Make sure the goods are not prohibited from entering Canada
– Determine whether or not the goods you plan to import are subject to restrictions or other requirements
– All goods that are imported to Canada are subject to certain taxes and duties. The cost for these are depending on a number of factors, including the tariff classification of your goods or cargo, the applicable rate of duty, and the taxes payable upon importing. Figuring it all out without the necessary experience can become a complex undertaking. Mistakes in your declaration can become costly and delay the receipt of your goods. It might therefore be a good idea to use the services of one of the licensed Canadian customs brokers to ensure your information is correct and to speed up the process.
These numbers are used by CBSA to determine the rate of Canada import duties paid when importing goods into Canada and are based on both the type of item being imported as well as the material it is made from. Once you have a tariff classification number, you can then determine the applicable tariff treatment and rate of duty.
There are a number of preferential tariffs when it comes to Canadian import duties, details of which you can review on the official CBSA, for example the
– Most Favored Nation (MFN) Tariff .
This is a tariff applied to a country with most favored nation status and extends the lowest possible tariff a country can assess on another country.
Another one is the Special Tariff Provision
These can for example be trade agreements such as the North American Free Trade Agreement (NAFTA), the United States Tariff (UST), Canada-Israel Agreement Tariff (CIAT), Canada-Costa Rica Tariff (CRT), the Mexico Tariff (MT) or the Mexico-United States Tariff (MUST). – In order to take advantage of a particular trade agreement or tariff treatment, you must possess proof of origin for the specific trade agreement at the time of importation
The 5% goods and services tax (GST) is a tax that applies to most goods and services in Canada.
An excise tax (sometimes it’s also called a duty of excise special tax) is a tax imposed by Inland Revenue on the sale of specific goods or a good produced for sale.
Some imports are also exempted from taxes. A few examples include medical devices, prescription drugs, basic groceries, and agriculture and fishing goods.
Canada import duties are calculated on the “value for duty”, that is essentially the price you paid for your goods converted to Canadian funds. The duty and tax percentages are based on that rate. In certain cases, some additions or subtractions must be made to this amount.
To calculate import duties and taxes take the value in the currency indicated on the invoice. Convert the value into Canadian Dollars (CAD) using the exchange rate from the date of direct shipment.
Choose your Vendor, Shipper or Exporter, identify the mode of shipping to be used (Highway, Sea, Rail, Air, Post or Courier Service) and determine the desired or expected CBSA office of entry. Canadian import duties can vary strongly depending on the port of entry and the final destination.
Unless you transport a shipment yourself, the carrier must declare all commercial goods upon arrival. The carrier uses a bar-coded Cargo Control Document (CCD) or the Electronic Data Interchange (EDI) system to report to the CBSA.
- Border Services Officers may examine your shipment to monitor compliance with CBSA requirements or other governmental department restrictions, and to ensure that you have properly declared your Canadian import duties. You are responsible for any costs incurred for the examination.
If you handle the import of your shipment yourself, complete and present your accounting documents (B3-3, Canada Customs Coding Form) in person at a CBSA Office.
– You will need the following documents:
– 2 copies of form A8A-B, Cargo Control document (CCD), which will be provided to you by the carrier
– 2 copies of form CI1, Canada Customs invoice (or commercial invoice)
– A paper copy of all Import Permits, Certificates, Licenses, or required documents from other government departments and agencies (OGD) or an electronic copy (EDI – OGD Interface)
The CBSA will assign a unique 14-digit transaction number to your B-3 accounting documents for each transaction.
- Release on minimum documentation (RMD) allows for the release of goods prior to the payment of duties and taxes. The RMD accounting option requires the electronic transmission of RMD release requests using the Electronic Data Interchange (EDI) system and therefore must be done by a CUSTOMS BROKER.
– Self-adjustments may result in duties and taxes owing, may be revenue neutral, or may result in a refund due to you.
– Errors made in the accounting information of a shipment must be corrected within 90 days of discovering the error where the change is neutral or owing the government money (including interest).
– If the error result in a refund of duties or taxes paid, an application for refund can in most cases be filed up to 4 years from the date the goods were accounted for
– Self adjustments must be made on form B-2
– All records pertaining to your importation and to your Canada import duties must be kept for 6 years following the importation of goods in either paper or electronic format.
– This information must include quantities received, price paid, country of origin, vendor, product, and all other related information
– All commercial importations may be verified and adjusted for origin, value for duty, or tariff classification for up to 4 years after importation
– If an adjustment is made the CBSA will issue a Detailed Adjustment Statement (DAS) that outlines the adjustment and will be given 30 days to pay any duties and taxes owing.
You can reduce or eliminate customs duty on qualifying goods through duties relief incentives. The duty deferral program enables companies to defer or be relieved of the payment of duties using one of the following:
– Duties relief program
– Drawback program
– Customs bonded warehouse program
Please use this guide to ensure all requirements are met when importing into Canada.
We hope, we provided you with a better understanding of the import duties in Canada and it will help you to clear you goods faster and easier!
If you have comments or questions concerning Clearit.ca’s customs brokers guide to importing, please contact us through our website our call our toll free number.